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November 24, 2015

SAP User Group Conference 2015: Users fear costly S4 HANA upgrade fees

News: Confusion over the word 'promotion' and chargeable upgrades.

By James Nunns

Corporate messages from companies can be a little tiresome to sift through, which is why a user group conference is a great place to find out if the flowers do smell as sweet as we are told.

As an independent body from SAP, the UK&I SAP User Group listens to the hopes and fears of the company’s user base, feeding it back to the company in hope of guiding it and improving customer experiences.

The group’s role on the first day of the conference was one of updating those in attendance of what to expect over the next two days; getting feedback from users, educating them on SAP products and importantly, informing them about the HANA and S4 roadmap.

Visibility is key for customers as they decide when to transition to S4 HANA. Typically, customers that have been paying support and maintenance fees have been able to upgrade for free.

However, there is now some doubt as to whether that is to remain the case.

Philip Adams, Chairman, UK&I SAP User Group, told CBR: "At the minute, as of this quarter, there is a promotion for customers who want to move from the current business suite to S4 HANA, they are calling it a promotion."

The confusion over the word "promotion" means that users don’t know what happens when this ends and whether an upgrade then becomes chargeable.

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Adams, said: "Our concern is that we have paid maintenance and support for the past X number of years to support the development of that product (S4).

"Traditionally we can upgrade as part of our maintenance and support agreement, are you telling us now that that isn’t the case? That we can’t upgrade without paying extra license fees?"

Although early adopters aren’t faced with this concern, Adams says that those that are doing it later have no visibility of whether they will have to pay extra.

With HANA being placed at the ‘Digital Core’ and customer interviews being focused on the adoption of S4 HANA, the message is clear; the technology is here so please move to it.

Moving ERP systems in to the cloud is a big task and SAP has got off to a reasonable start, saying that 10,000 customers have bought its product, although it is unknown how many have actually implemented it.

While a big move to an SAP suite may be a big undertaking, Ray Wang, Principal Analyst & Founder, Constellation Research says that if you haven’t moved to the cloud or upgraded in 15 years then everything will look better than what you have.

However, there appears to be some improvements required when it comes to functionality.

Wang told CBR: "If you’ve upgraded consistently and religiously you’re going to be a little bit mad because you’re still missing part of that functionality, especially when it comes to industry verticals."

Although the general feedback I got from speaking to customers was positive in terms of the smoothness of the transition to S4 and the benefits of HANA, work needs to be done to improve visibility when it comes to transitioning to S4.

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